House Votes Show Support for CDFI, CFPB
FY24 Financial Services appropriations bill pulled for unrelated reasons.
The House last week defeated attempts to amend the FY24 Financial Services appropriations bill to cut all funding for the CDFI Fund and the CFPB, but Republican leaders ultimately were forced to pull the overall bill from the House floor for unrelated reasons.
The future of the bill, H.R. 4664, is uncertain, but the House delivered a clear signal that members support the existence of the CDFI program and the CFPB.
The House slogged through dozens of amendments to change programs in the bill, before GOP leaders pulled the measure over, according to press reports, a provision dealing with family planning services in the District of Columbia.
On Wednesday, the House defeated, 115-306, an amendment by Rep. Glenn Grothman, R-Wis., that would have eliminated all CDFI funding for FY24.
Grothman said that the CDFI program amounts to cronyism that further enriches the wealthy.
“I think there is nothing worse than public-private partnerships, because it means what you are doing is you wind up enriching already wealthy people at the expense of the taxpayer and allowing people in the community to become wealthier, not by necessarily doing something that is better for the community or successful in the free market,” he said, in pushing his proposal.
However, House Financial Services Appropriations Subcommittee Chairman Rep. Steve Womack, R-Ark., said Grothman was mischaracterizing the CDFI program.
“Community Development Financial Institutions stimulate economic growth and create and sustain employment opportunities in rural and low-income areas, like a lot of America,” he said. “The CDFI fund ensures CDFIs are able to provide these underserved communities access to capital by awarding certified CDFIs with tax credits and monetary support.”
While Womack spoke in favor of the program, his bill still would cut funding for the CDFI program, from the $324 million it received in FY23 to $278.6 million in FY24.
The House also defeated, 140-286, an amendment by Rep. Scott Perry, R-Pa., to eliminate all funding for the CFPB.
“The CFPB operates off a fundamentally flawed assumption that our fellow Americans, the little guy, is a rube and they lack the agency and the intelligence to choose products and services that fit their needs and, instead, must be infantalized while further empowering a government that does not have their best interests at heart,” he said.
However, House Financial Services Appropriations Subcommittee ranking Democrat Steny Hoyer of Maryland said the agency plays a vital role for consumers.
“The CFPB promotes fair and transparent financial markets by enforcing regulations and consumer protection laws,” he said. “This oversight helps maintain the integrity of the financial system, fostering trust and confidence among consumers and businesses alike,” he said.
Even without the amendment, the bill changes the structure and funding for the agency—converting it to a bureau governed by a five-member commission that is subject to annual appropriations.
Currently, the agency is run by a single director, who draws funding from the Federal Reserve system.
Credit Union Priorities
Before the bill was pulled from the House floor, credit union trade groups weighed in on their priorities in the measure, saying that they are in favor of converting the CFPB into a commission and asking Congress to provide the CDFI Fund and the NCUA’s Community Development Revolving Loan Fund with as much money as possible.